The top tech stocks typically get all the attention, but there is plenty of opportunity among smaller companies that have significant upside.
Let’s take a look at four lesser-known tech stocks that have increased in value in recent months and weeks: Zscaler (ZS), Elastic N.V. (ESTC), Digital Turbine (APPS) and Sprout Social (SPT).
Business operations are moving to the cloud. The transition to the cloud creates the need for cloud-based security solutions. Thus, ZS’s product, dubbed Zero Trust Network Access (ZTNA), is seeing a large increase in customers. ZS’s specialties range from web security to IoT security, vulnerability management, user activity on mobile devices, and beyond. In other words, businesses and governments in need of digital security solutions need not look any further than ZS.
ZS dipped to a mere $41 amidst the market-wide sell-off in the spring yet quickly soared nearly $100 in the next four months. The POWR Ratings show ZS has A grades in its Trade Grade and Buy & Hold Grade POWR Components. The stock has B grades in its Peer Grade and Industry Rank Components. ZS is ranked third of 23 stocks in the Software – Security space.
The analysts are in love with ZS, rating it as an outperform. Walter Pritchard, an analyst with Citi, recently upgraded his ZS rating from Neutral to Buy, setting a one-year price target of $152 for the stock. This is quite the hike in price target considering Pritchard previously had an $86 price target on the stock.
Elastic N.V. (ESTC)
It is not easy to explain ESTC’s business. In laymen’s terms, ESTC is best described as a search-oriented business. ESTC provides software that stores and processes information from numerous sources and formats. ESTC also conducts searches, analyses, and provides insightful visualization for clients.
ESTC has A POWR Ratings grades across the board but for its Industry Rank of C. The stock is ranked first of 10 in the Software – SAAS category. Out of the 11 analysts who have studied ESTC, 9 insist it is a Buy, two recommend holding and none advise selling.
ESTC popped 10% last week after Tyler Radke, an analyst with Citi, issued a Buy rating on the stock. ESTC has 57% YOY revenue growth, a 72% gross profit margin in its most recent quarter, and a price to sales ratio of 17. These are solid numbers all the way around.
It should not come as a surprise if ESTC blasts through its 52-week high of $109.55 within the next couple weeks.
Digital Turbine (APPS)
As time progresses, many more mobile operators need solutions and products tailored to their unique offerings. APPS provides such solutions for mobile operators as well as device OEMs and other groups. APPS offers…
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